Thursday, October 27, 2011

Morning Journal Central bank monetary policies


News on Stocks in Our Portfolios--courtesy of Seeking Alpha

03:09 PM Wal-Mart (WMT +1.1%) will move its New York apparel office back home to Arkansas as it works to reduce costs and focus on more basic clothing. “We don’t need to be on Broadway to sell socks and underwear and T-shirts," the retailer says, noting that since the company returned to basic offerings, its sales trend in apparel is the strongest in two years. Comment!

12:14 PM An agreement to settle the dispute that would keep Walgreen (WAG -3.7%) stores in the Express Scripts (ESRX -12.9%) network would be "better for everyone," ESRX head George Paz says during a conference call after its earnings report, but "it looks less and less likely that's going to occur." Paz says his company has strong client support to move ahead without an agreement. Comment!

09:49 AM Best Buy (BBY), Wal-Mart (WMT) Staples (SPLS) and other retailers, which are counting on tablets and e-readers to boost Christmas sales, could miss out if a lot of consumers opt to buy directly from the manufacturers. Piper Jaffrey found that 71% of shoppers interested in a Fire planned to buy it via Amazon (AMZN). Comment!


08:56 AM Boeing's (BA) inaugural 787 flight lands in Hong Kong after a four-hour flight from Tokyo. Early reviews from passengers - who paid around ¥78K ($1K) for the historic flight - center on the aircraft's "amazing" windows replete with a glare-reducing, electrical dimming system. Boeing hopes the buzz stays positive after tagging the 787 as a "game changer" for the industry. Shares +3.7% following BA's Q3 report (I, II). Comment!

08:39 AM More on ConocoPhillips' (COP) Q3 report: E&P revenue increases to 2.19B (+46% Y/Y) led by stronger commodity prices, partially offset by higher taxes and lower volumes. CEO Jim Mulva: "While commodity prices were higher, E&P production was lower, mainly due to suspended operations in Bohai Bay and Libya." Shares +1.9% premarket. (PR) Comment!

08:26 AM Shares of C.H. Robinson Worldwide (CHRW) take a beating, down 7.8% premarket, after the company falls a bit short with its Q3 results and gets slapped with a downgrade from analysts at Baird to Neutral. Comment!

07:57 AM More on Boeing's Q3: Growth driven by 9% Y/Y increase in Commercial Airplanes revenue, held back by flat Defense, Space, and Security revenue. Quarter-end backlog stood at $332B, up from $323B at end of Q2. Company expects $68B-$70B in 2011 revenue vs. $68.9B consensus, $4.30-$4.40 in 2011 EPS vs. $4.27 consensus. BA +3.1% premarket. (PR) Comment!

03:23 PM Analysts draw hopeful distinctions between 3M's (MMM -5.8%) earnings miss and Caterpillar's (CAT -1.4%) powerhouse report in connecting them to the overall economy, saying it's mostly a unique 3M problem. 3M’s industrial and transport business showed 8.3% core growth, Barclays points out; "This is the business that matches up more closely with industrial peers." Comment!

03:08 PM A jury trial in Missouri seeking $170M in damages from Altria's (MO -0.4%) Philip Morris unit over deceiving advertising ended in a mistrial after jurors came back to the judge deadlocked. Though the case took 11 years to reach fruition, an attorney for the plaintiffs says they will try again - noting the group only came up one vote short of a victory in the case. Comment!

01:48 PM Eli Lilly (LLY -1.2%) says it will withdraw severe sepsis treatment Xigris from all markets after a recent study showed the drug failed to reduce mortality in patients with septic shock. Xigris generated ~$100M in sales last year, and the drugmaker will take a Q4 after-tax charge of ~$0.05/share. Comment!

08:08 AM Visa (V) and MasterCard (MA) are developing technologies and strategies that will enable them to sell, for use in targeted ads on the Internet, insights gained from the billions of credit-card purchases they process. Because of privacy restrictions, the information sold would be based on anonymous data. Comment!

More earnings reports:
Reported Expected

BA $1.46 $1.10
COP 2.52 2.17
ADP .61 .61
GD 1.83 1.77
PX 1.40 1.39
CHRW .70 .70
TROW .71 .74
ECL .75 .75
NUS .72 .61
BTU 1.01 .95

Economics

This Week’s Data


September new home sales rose 6.1% versus expectations of an increase of 1.6%.

Weekly jobless claims fell 1,000 versus estimates of a 3,000 decline.
http://advisorperspectives.com/dshort/updates/Weekly-Unemployment-Claims.php

Initial third quarter GDP was reported at up 2.5%, in line with forecasts; the GDP deflator was also reported at up 2.5%, also in line.

Other

More analysis on household income from my favorite liberal (short):
http://dailycaller.com/2011/10/26/not-so-new-gilded-age/

Politics

Domestic


An interesting review of central bank monetary policies (medium):
http://www.realclearmarkets.com/blog/Malfeasant%20Central%20Bankers%2C%20Again%2C%20November%202011%5B1%5D.pdf

Tony Blankley on our political class (medium):
http://townhall.com/columnists/tonyblankley/2011/10/26/the_administration_slithers_away_from_reality

Is there any wonder why the Occupy Wall Street group is pissed (medium):
http://www.zerohedge.com/news/freddie-ceo-leaving-company-get-39-million-receiving-145-billion-bailout-cash-over-his-tenure

International War Against Radical Islam

Jonathon Goldberg on American imperialism (medium):
http://townhall.com/columnists/tonyblankley/2011/10/26/the_administration_slithers_away_from_reality